Federal Court proceedings against Coles

Federal Court proceedings against Coles

FMCGB-Web-news-Coles-case-back-in-courtThe Australian Competition and Consumer Commission (ACCC) has instituted proceedings in the Federal Court of Australia against Coles Supermarkets Australia Pty Ltd and Grocery Holdings Pty Ltd (together, Coles) alleging that Coles engaged in unconscionable conduct in contravention of the Australian Consumer Law (ACL).

The ACCC is alleging that Coles took advantage of its superior bargaining position by demanding money from suppliers that it was not lawfully entitled to, and was unconscionable.

“This is a matter of significant public interest involving allegations of unconscionable conduct by a large national company in its dealings with small business suppliers in the highly concentrated supermarket industry,” ACCC Chairman Rod Sims said.

Coles has rejected the claims saying: “The ACCC’s allegations concern a limited number of dealings with five Coles suppliers three years ago. For context, Coles has over 4,000 suppliers, and is in contact with many of them on a daily basis. It has millions of individual contacts with suppliers every year.”

According to Coles, all five suppliers continue today to be valued suppliers to Coles. The proceedings arise out of the same investigation as the proceedings that were instituted by the ACCC against Coles on 5 May 2014 in respect to Coles’ Active Retail Collaboration (ARC) program.

Coles states that the allegations involve “communications and negotiations about the failure to deliver products in the lead-up to the Christmas 2011 trading period, as well as waste and damage to products and the profitability of products. The individual communications with, and regarding, suppliers referred to in the ACCC’s Statement of Claim, were part of ongoing commercial negotiations involving a much broader, longer-term trading relationship with each supplier.”

The ACCC is seeking pecuniary penalties, declarations, injunctions and costs.

The matter is listed for a directions hearing in Melbourne at 10am on Friday 24 October 2014 before Justice Gordon.

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